TRADING TECHS. INT’L, INC. v. CQG, INC.: Jan. 18, 2017. Before Newman, O’Malley, Wallach.


  • A new application or computer-implemented function is patent eligible when it is not simply the use of a computer to conduct a known process, but rather improves the whole system’s capability.

Procedural Posture:

Judge Coleman of the Northern District of Illinois denied the defendant, CQG’s, Motion for judgment as a matter of law that the claims of the two asserted patents—which claim a method and system for the electronic trading of stocks, bonds, futures, options, and similar products—were directed to patent-ineligible subject matter. CQG appealed. CAFC affirmed.


  • Subject Matter Eligibility: The CAFC affirmed that the patents’ claims were not directed to an abstract idea and thus were patent eligible subject matter. Under Step 1 of Alice’s two-step framework, the CAFC agreed with the district court that claims requiring “a specific, structured graphical user interface paired with a prescribed functionality directly related to the graphical user interface’s structure” are directed to a specific improvement to the ways computers operate. The court noted that the graphical user interface improvements had no pre-electronic trading analog, and were not an idea that had long existed—the “threshold criterion of an abstract idea and ineligible concept.” Similarly, the CAFC agreed with the district court’s alternative analysis under Alice’s Step 2. The claimed static price index was an “inventive concept” that allowed traders to more efficiently and accurately place trades using this new electronic‑trading system. This system was distinguished from the routine or conventional use of computers or the Internet, and the specific structure and corresponding functionality of the graphical user interface were not abstract ideas, in contrast to conventional computer implementations of known procedures. Judge Newman’s opinion provides a brief discussion of recent precedent finding patent-eligible subject matter and distinguishes the current case from several recent cases that “negated patent eligibility.” The CAFC reiterated its precedent holding that specific technological modifications to solve a problem or improve a known system’s functioning generally produce patent-eligible subject matter.